Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

2 Health-Care Stocks for Times of Uncertainty

These dividend-rich safe havens will let you sleep at night.

It is nearly impossible to time the markets. Since August, when we had the worst market crash since 2009, the market has been bouncing in a defined range like a Ping-Pong ball. While economists recheck the alignment of the planets to predict the next big move, most of us are simply tired of watching our portfolios oscillate between green and red every day. Although it's a difficult time for buy-and-hold investors, there are stocks that should hold up in their fundamentals, even if a global recession is headed our way.

Health-care stocks moving on upFear has induced a massive exodus from risky assets in the wake of the S&P downgrade. Since the health-care industry doesn't care about economic cycles, health-care stocks have been performing admirably. Abbott Labs(NYSE: ABT), for instance, has been lifted far above its August lows of $46.29 a share. Investors have probably been chasing the stability of the company's earnings prospects, and of course the large dividend. The company has recently announced that it intends to split its pharmaceutical division into a new company while keeping the rest of the company under the Abbott name; more on that later.

In light of recent fears, Treasury bill yields have hit rock bottom, as European banks and money managers poured into the perceived safety of the dollar. The effect was extreme enough to cause negative yields on TIPS (fixed-income instruments designed to accommodate for inflation) in October. While T-bills are considered the safest and most liquid financial instruments available, their yields are absolutely terrible relative to dividend stocks. As small investors, we seldom need to worry about liquidity, because of the small size of our transactions. Since we trade in such tiny blocks, we won't affect the price of any large health-care stocks like Abbott. Besides, as buy-and-hold investors, we aren't looking to sell our shares unless there are fundamental changes.

Buying into Abbott gives you a 3.6% yield, which is a lot higher than any standard T-bill rate nowadays. The stocks of Abbott and the very similar Johnson & Johnson(NYSE: JNJ), which also yields 3.6%, make up an ultrasafe dividend portfolio that significantly outperforms even 30-year T-bills in the long run.

Diversification makes them look even betterWhat makes these companies so safe? As I said, health-care stocks generally don't care about the economy. What makes Abbott Labs and Johnson & Johnson even better bets is that their product lines are very diverse. Not only do these companies sell pharmaceuticals, but they also have very strong presences in medical devices, consumer products, and diagnostics.